C.C.No.41 OF 2011

Between

K.Kiran Kumar Reddy S/o.K.C.S.Reddy

Aged about 37 years, Indian,

Occ:Software Engineer, R/o.B.98,

Indian Airlines Colony Opp:Begumpet P.S.

Secunderabad-500 003. rep. by his GPA

Holder Sri K.C.S.Reddy S/o.Ranga Reddy

Aged about 68 years, Occ:Retd. From

Indian Airlines R/o.B-98, Indian Airlines

Colony, Opp:Begumpet P.S.,

Secunderabad-500 003.                                        Complainant

                        And

M/s.Omega Shelters Private Ltd.,

810-818, Swapnalok

D.No.92/93, S.D.Road,

Secunderabad-500 003,

Rep. by its Managing Director,

Mr.Ravinder Agarwal.                                           Opposite party.

Counsel for the Complainant         :  M/s V.Gourisankara Rao

Counsel for the Opposite party      : M/s.Deepak Bhattacharjee.

QUORUM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT,

AND

SMT.M.SHREESHA, HON’BLE MEMBER,

THURSDAY, THE TWENTY THIRD DAY OF AUGUST,

TWO THOUSAND TWELVE

Order (Per Smt.M.Shreesha, Hon’ble Member)

***

        The brief facts as set out in the complaint are that the complainant, attracted by the publicity of opposite party, that it was developing a gated community under the name and style ‘THE NEIGHBOURHOOD’ at Gundla Pochampally Village, Medchal Mandal, Ranga Reddy District and would construct 390 independent houses of 3 different sizes (38 sq. yds. 281 sq. yds. and 218 sq. yds) and got HUDA sanction plan No.02/MP2/HUDA/07 dated 7-1-2007 and for multi-storeyed apartments vide permit No.3167/PLG/H/2007 dated 31-3-2007 along with recreation club, swimming pool, tennis court, open space for parks, overhead water tank, Tar roads, street lights, avenue plantation etc. the complainant intended to purchase an independent house and opposite party offered to sell plot No.25 admeasuring 358 sq. yds. for Rs.48,50,000/- and construction cost of the house would be Rs.46,50,000/- and after negotiations, opposite party reduced the cost of the plot to Rs.42,50,000/-.  The complainant submitted that opposite party promised to complete the construction and handover possession of the house within 21 months.  The complainant submitted that he paid Rs.19,00,000/- vide SBI cheque No.436407 dated 24-2-2007, Rs.19,00,000/- vide SBI cheque No.436408 dated 24-2-2007 and another sum of Rs.34,83,339/- vide SBI cheque No.515948 dated 01-7-2008 and thus by 01-7-2008, the complainant paid Rs.72,83,339/- out of Rs.95,00,000/- but the opposite party failed to execute an agreement of sale for construction of the house or get the sale deed of the plot executed in favour of the complainant.  The complainant submitted that the opposite party has not completed the construction of the bungalow and not provided the agreed common basic amenities and only the structure of the house was completed and later abandoned further construction without any reason, internal and external plastering of the house, flooring, paintings, sanitary ware, doors and windows, kitchen platform, paintings, compound walls etc. are not yet provided.  Opposite party has not yet constructed the black top roads, culverts, not provided electrical lines, not constructed over head tanks, avenue plantation was not provided, club house, swimming pool, parks and other common amenities are also not provided and opposite party has also unilaterally changed the house plan without the knowledge and consent of the complainant whereby the servant quarter and pooja room etc. proposed in the initial plan were deleted.  The complainant submitted that though the scheduled date of handing over possession of the house expired, opposite party has not taken any steps to keep up their promises and that he has taken a housing loan of Rs.73,00,000/- from State Bank of India, S.P.Road, Secunderabad and his hard earned money of Rs.72,83,339/- was unnecessarily held up with the opposite party and he is sustaining heavy loss of interest and also loosing rentals due to abnormal delay in completion of the house and  he and his family members have been subjected to serious inconvenience, mental agony and financial loss.  The complainant and his GPA holder made several phone calls requesting and reminding opposite party to complete the house as per the schedule and the GPA holder of the complainant also visited the opposite party but there was no proper response.  The complainant submitted that he is ready and willing to pay the balance amount provided the opposite party completes the house in all respects  along with amenities.  The complainant got issued a legal notice dated 28-12-2010 to opposite party for which opposite party issued a reply dated 10-1-2011 without giving explanation for each and every allegations of the complainant and denying the allegations in toto.   The complainant submitted that opposite party informed that they have named one Sri M.Sridhar Murthy Advocate as their arbitrator and requested the complainant to appoint his own arbitrator and the complainant submitted that as held by the Supreme Court and other courts, Arbitration Act is not a bar for the complainant to file the complaint under the provisions of Consumer Protection Act, 1986.  The complainant submitted that the action of the opposite party failing to execute an agreement of sale for construction of house or get the sale deed of the plot executed in favour of the complainant and failure to complete the construction of the house in all respects and hand over possession within the schedule time amounts to deficiency in service and unfair trade practice.  Hence the complaint for a direction to the opposite party to complete and handover the Bungalow in plot No.25 in “The Neighbourhood”  by duly executing the registered sale deed in all respects as per agreed specifications along with promised common amenities and pay interest at 12% p.a. on Rs.72,83,000/- from the schedule date of handing over possession till the actual date of handing over possession of the house together with compensation of Rs.2,00,000/- or in the alternative refund Rs.72,83,000/- along with interest at 12% p.a. from the respective dates of payments till the date of realization together with compensation of Rs.2,00,000/- towards inconvenience and costs of Rs.25,000/-.

        Opposite party filed written version resisting the complaint and contending that the complaint is barred by limitation.  Opposite party submitted that the dispute raised does not fall under the definition of Consumer Protection Act, 1986 as it is a contractual obligation under an agreement and comes under  right of specific performance of the contract under the Specific Relief Act.  It submitted that the complainant is neither dejure nor defacto owner of the property and till the registered sale deed is registered and there is due compliance of Section 35 of Indian Stamp Act and Section 49 of Indian Registration Act, the complainant cannot himself as the owner of the property.  Opposite party submitted that the complaint is filed based on documents dated 22-6-2007 and 23-7-2007  and the sale deed is to be executed pursuant to the document was a compulsorily registerable document U/s.17 of Indian Registration Act and the document is not sufficiently stamped and therefore hit by Section 35 of Indian Stamp Act and Section 49 of Indian Registration Act and therefore the complainant cannot seek any relief.  The complainant submitted that as per the statement of account, there are unpaid dues of Rs.28,13,479/- and the possession of the property will be given after completion of registration formalities and till the entire sale consideration is paid, the question of seeking physical possession by the complainant will not arise.  Opposite party further submitted that both the agreement of sale and construction agreement contain arbitration clause and the dispute resolution procedure provided in the document cannot be overlooked for seeking relief under the Consumer Protection Act, 1986.  Opposite party submitted that the complainant is only an agreement holder and without seeking the registration of sale deed is not entitled to seek completion of construction as a consumer dispute and submitted that there is no deficiency in service and the relief sought is governed by the provisions of Section 73 of Indian Contract Act.  Opposite party submitted that the claim of compensation of Rs.2,00,000/- and Rs.25,000/- towards legal expenses interest at 12% p.a. on Rs.72,86,000/- etc. also are within the domain of Section 73 of Indian Contract Act and submitted that the proceedings under the Consumer Protection Act, 1986 are summary in nature and hence any decision taken summarily in the above referred case will be against the spirit of justice.  Opposite party submitted that the complainant had raised the dispute under legal notice dated 28-12-2010 and in response to that the opposite party had already appointed Sri M.Sreedhara Murthy as nominee arbitrator and four weeks time was given to the complainant to nominate their arbitrator for constitution of the arbitral under reply notice dated 10-1-2011 but the complainant without appointing their nominee arbitrator filed the consumer dispute and submitted that the dispute is an arbitral dispute under the provisions of Arbitration and Conciliation Act and prayed for dismissal of the complaint.

        The G.P.A holder of the complainant filed his affidavit and also additional affidavit reiterating the facts stated in the complaint and relied on Exs.A1 to A9.  He submitted that it is incorrect to state that the complaint is barred by limitation.  He submitted that as per Ex.A3, statement of account, reveals that the opposite party received Rs.72,83,339/- till 28-4-2010 and has to handover the possession of the bungalow by 21 months and till date he has not handed over possession or refunded the amount paid by him.  He further submitted that the written version of opposite parties never disputed about Exs.A1 and A2 receipts and Ex.A3 statement of account and opposite party neither executed agreement of sale or sale deed for unfinished house inspite of receiving Rs.72,83,339/- out of Rs.91,00,000/- which is gross negligence and unfair trade practice and hence opposite party is estopped from taking the technical pleas that the receipts 22-6-2007 and 23-7-2007 are not sufficiently stamped under Indian Registration Act and submitted that all the payments were made to opposite party through cheques.  The complainant submitted that the opposite party abruptly stopped the construction and never issued any notice calling upon the complainant to pay the balance and alleging that the construction was delayed due to non payment of the balance amount.  He denied that both agreement of sale and construction agreement contained arbitration clause as alleged in written version  and submitted that the opposite party never executed the same and submitted that opposite party executed two agreements of sale for construction of two houses in  the name of his cousin one Smt.Ch.Padmaja Reddy and she filed two separate complaints C C.Nos.190 and 191/2011 before Hon’ble National Commission and in so far as the complainant is concerned, the opposite party never executed any agreement of sale and hence cannot take the plea of arbitration.  

        Opposite party filed affidavit evidence of its Director reiterating the facts stated in the written version.

        The counsel for complainant filed written arguments.

The brief point that falls for consideration is whether there is any deficiency in service on behalf of the opposite party and if the complainant is entitled to the relief sought for in the complaint?

It is the complainant’s case that the opposite party offered to sell flat No.25 admeasuring 358 sq. yds. for Rs.48,50,000/-   and the construction of the bungalow would be Rs.46,50,000/- which was later reduced to 42,50,000/-.  Exs.A1, A2 are the receipts and A3 is statement of account showing the amount paid by the complainant for Rs.19,00,000/- on 22-6-2007, Rs.19,00,000/- on 23-7-2007 and Rs.34,83,339/- vide cheque dated 01-7-2008.  As per Ex.A3 dated 28-4-2010 the total amount paid is Rs.72,83,339/-.  It is the complainant’s case that the opposite party did not execute any agreement of sale and despite paying Rs.72,83.339/- out of the total sale consideration of Rs.95,00,000/-, the opposite party completed only the structure of the house and did not complete the external internal plastering, painting, flooring, sanitary ware, doors and windows, kitchen plat form compound walls etc., and other facilities like overhead tanks culverts, electrical lines and common facilities like black road, club house, swimming pool, parks as promised were not provided.  The complainant got issued a legal notice on Ex.A4 on 28-12-2010   specifying all these details and calling upon the opposite party to complete the amenities or refund his amount with interest and compensation for which the opposite party replied vide Ex.A5 on 10-1-2011 stating that there is an arbitration clause in the construction agreement and agreement to sell and that the complainant should adhere to it.  Ex.A6 and A7 is the brochure issued by the opposite party. 

The complainant has amended his prayer   seeking direction to include execution of sale deed.  It is the main case of the opposite party that there are unpaid dues of Rs.28,13,479/- and the possession of the property is to be given after completion of registration formalities and after final decision by the architect.  The learned counsel further contended that both the agreement of sale and construction agreement contained arbitration clause and this dispute resolution procedure cannot be overlooked.  We observe from the record that no such agreement of sale was filed before this Commission. We also rely on the decision on the apex court in  II(2006) CPJ 259 (NC) in YASHPAL MARWAHA v. PUSHPA BUILDERS LTD., & ANR wherein it was held that

Even if there are pending arbitration proceedings, it is not a bar fora entertaining a consumer complaint. Though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof,

we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matterin accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties.  The reason is that the Act intends to relieve the consumer of the cumbersome arbitration proceedings or civil action   unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise than those given in the Act.”

keeping in view the aforementioned judgement, merely because there is a clause for arbitration, the contention that this Commission does not have jurisdiction is un-sustainable.  Firstly the agreement of sale stipulating such a clause is not filed.  Secondly the complainant has not approached any arbitrator nor was any award passed at the time of filing of the complaint, therefore, we are of the considered view that this Commission has jurisdiction to adjudicate this matter.  Exs.A1 to A3 clearly establish that the opposite party issued receipts forRs.72,83,339/-.  Ex.A7 brochure evidences the offer made by the opposite party towards construction specifications and also the amenities being provided towards common areas.  The opposite party did not deny that the amenities were not completed, they only state that still there is a balance amount to be paid by the complainant. The complainant has paid Rs.72,83,339/- out of the total sale consideration of Rs.95,00,000/- and the opposite party should complete the construction of house No.25 as per the specifications given in the brochure and execute the registered sale deed within three months from the date of receipt of order and the complainant shall pay the balance sale consideration before the execution of sale deed.  Apart from completing the works, the opposite party is also directed to pay  compensation of Rs.50,000/- and costs of Rs.5,000/- failing which the opposite party is directed to refund the amount paid with interest at 12% p.a. from the respective dates of payment till the date of realization together  with compensation of Rs.50,000/- and costs of Rs.5,000/-. 

In the result this complaint is allowed in part directing the opposite party to complete the construction of house No.25 as per the specifications given in the brochure and execute the registered sale deed within three months from the date of receipt of order and the complainant shall pay the balance sale consideration before the execution of sale deed.  The opposite party is also directed to pay compensation of Rs.50,000/- and costs of Rs.5,000/- if the opposite party does not complete the construction and execute sale deed within the stipulated period, the opposite party is directed to refund the amount paid with interest at 12% p.a. from the respective dates of payment till the date of realization together  with compensation of Rs.50,000/- and costs of Rs.5,000/-. 

                                                                                                                                                                                Sd/-  PRESIDENT.                 

Sd/-MEMBER.

JM                                                                     Dt.23-8-2012

APPENDIX OF EVIDENCE

For the complainants:                                       For Opp.party:

Affidavit evidence of GPA                  Affidavit evidence of O.P filed.

holder of complainant filed.             

Exhibits marked for the complainants

Ex  A-1-Receipt dated 22-6-2007 issued by OP to complainant for

            Rs.19,00,000/-.

Ex.A2- Receipt dated 23-7-2007 issued by OP to complainant for

            Rs.19,00,000/-.

Ex.A3-Statement of account for Plot No.25 at neighbourhood project.

Ex.A4-Legal notice dated 28-12-2010 of complainant issued to opposite

         Party  with postal receipt and acknowledgement.

Ex.A5-Reply notice dated 10-1-2011.

Ex.A6-Layout plan of plots.

Ex.A7-Brochure of “The Neighbourhood”

Ex.A8-General Power of Attorney of K.Kiran Kumar Reddy.

Ex.A9-Form No.32.

Exhibits marked for the opposite party

-NIL-

Sd/-PRESIDENT.

                                                                        Sd/-MEMBER.

JM                                                                     Dt.23-8-2012